MEMORANDUM OPINION AND ORDER
JAMES BROWNING, District Judge
THIS MATTER comes before the Court on the Defendant's Sentencing Memorandum, filed April 1, 2010 (Doc. 35). The Court held a sentencing hearing on May 3, 2010. The primary issue is whether the Court should vary from Defendant Reginald Hall's advisory guideline range, 151 to 188 months, to a sentence in a range of 77 to 96 months. Because the Court believes the guideline range is inappropriate in this case, the Court will grant Hall's request for a variance, but not to the degree he requests. The Court will sentence Hall to 120 months in the custody of the Bureau of Prisons ("BOP").
FACTUAL BACKGROUND
The period in which Hall has been violating the law spans twenty-one years. Hall has a criminal history that began when he was seventeen-years old. He is now thirty-eight years old. He thus has spent a significant part of his life breaking the law.
Hall was raised in a part of Kansas City, Missouri known for violence and gang activity. See Sentencing Memo. at 2-3; Presentence Investigation Report ¶ 66, at 23 (disclosed February 5, 2010) ("PSR"). He joined one of the local gangs, and he was sent to prison for the first time at the age of nineteen. See Sentencing Memo. at 3; PSR ¶ 66, at 23; Id. ¶ 68, at 24. He has consistently used crack cocaine, often on a daily basis, since the tenth grade. See Sentencing Memo. at 3. His substance abuse stopped for a brief period of time — approximately one-and-one-half years. When he moved to New Mexico, however, he soon found a supply of crack cocaine and continued his drug use. See id. 1. Career Offender Status .
Hall's criminal history qualifies him as a career offender. Two of his qualifying convictions, from June 27, 1995, and July 24, 1995, are for drug trafficking by distribution. See PSR ¶ 27, at 8; Sentencing Memo. at 2. Both convictions involved the sale of single rocks of crack cocaine. See Sentencing Memo. at 2. Hall's third qualifying conviction is a March 3, 2003 conviction for robbery. On September 8, 2002, Hall drove up alongside a woman exiting a drugstore and grabbed her purse, dragging the woman for approximately twenty feet through the parking lot. See PSR ¶ 47, at 18-19.
2. Hall's Current Offense .
On October 9, 2008, Hall entered the Bank of America in Farmington, New Mexico, and attempted to rob the bank. See Sentencing Memo. at 1. He did not have a firearm or other weapon, although he indicated to the bank teller that he had a gun. See id. When the bank teller opened her cash drawer to give Hall the money, Hall reached over the counter and tried to grab the money out of the cash drawer with both hands. See id. The bank teller reflexively slammed the drawer shut, hitting Hall's hands and causing him to jerk back without getting any money. See id.; Response to Defendant's Sentencing Memorandum at 3, filed April 19, 2010 (Doc. 36) ("United States' Response"). Hall ran out of the bank, dropping a backpack which investigators later found.See Sentencing Memo. at 1. Police responded to the scene and began to search for Hall. See United States' Response at 3. Residents of a nearby trailer park said they saw a man matching Hall's description run into a trailer.See id. The police surrounded the trailer and called the residents out. See United States' Response at 3. The last person to exit was Hall, wearing different clothing. See PSR ¶ 6, at 4. Investigators found Hall's clothing inside the trailer. See United States' Response at 3-4. After waiving his constitutional rights, Hall confessed to the attempted bank robbery. See Sentencing Memo. at 1-2; United States' Response at 4. Hall states that he awoke that morning craving crack cocaine and needed to rob the bank for money to purchase some of the drug.See Sentencing Memo. at 2.
PROCEDURAL BACKGROUND
On December 9, 2009, Hall pled guilty to the Indictment, which charged him with a violation of 18 U.S.C. § 2113(a): Attempted Bank Robbery. See Sentencing Memo. at 2; Plea Agreement, filed December 9, 2010 (Doc. 30). The United States Probation Office found that Hall is a career offender. See id. ¶ 27, at 8. Hall's total adjusted offense level is 29. See PSR ¶ 29, at 8. A total offense level of 29 and a criminal history category of VI establishes a guideline imprisonment range of 151 to 188 months.See PSR ¶ 89, at 28.
In his Sentencing Memorandum, Hall argues that the advisory guidelines are too harsh and that the guideline imprisonment range is greater than is necessary to punish him. See Sentencing Memo. at 4. He contends that a sentence within the range of 77 to 96 months would be sufficient without being greater than necessary to provide just punishment and protect the public. See id. He argues that the career offender provision of the guidelines overstates the likelihood of recidivism for drug trafficking offenders, and, in particular, for African-Americans.See Sentencing Memo. at 5. Moreover, Hall argues that the Court should consider his age — he is thirty-eight years old — and that he presents a much lower risk of recidivism than he once did. See id. at 7. He also argues that, where a defendant shows an utter lack of sophistication in committing the criminal activity, a court may view that lack of sophistication as a mitigating factor. See id. at 8.
The United States opposes Hall's request for a reduction from the applicable guideline range and contends that a sentence of 151 months is sufficient but not greater than necessary. See United States' Response at 1. The United States argues that there is nothing in Hall's criminal history to distinguish him in a positive way from others falling within the ambit of the career-offender provision. See id. at 2. It contends that Hall's criminal history shows a propensity to break the law and a complete disdain for the law. See United States' Response at 4. Because of his criminal history and his underlying criminal conduct, the United States argues that a sentence of 151 months is appropriate. See United States' Response at 5.
At the sentencing hearing, Michael Keefe, Hall's attorney, indicated that there are no objections to the PSR. See Transcript of Hearing at 2:18-21 (taken May 3, 2010) ("Tr.") (Court, Keefe). Mr. Keefe stated, however, that he wished to add factual information regarding the trailer that Hall entered after fleeing the bank. Paragraph 9 of the PSR indicates that the trailer's owner did not know Hall, but Hall contends that he had known the woman for about a month and had been on a crack cocaine binge with her during the weeks leading up to the bank robbery. See Tr. at 2:21-3:7 (Keefe). Assistant United States Attorney Rumaldo Armijo objected, because the factual basis for his facts in the United States' response were taken from the plea agreement, and Hall pled guilty based on those facts. See Tr. at 3:9-15 (Armijo). Mr. Keefe clarified that he is not asking to change the facts in the plea agreement, but to add Hall's version to the PSR. Hall wishes to clarify that it is his position that he did not break into the trailer, but rather knew the owner — additional facts which have little to do with the crime charged or to which Hall pled. See Tr. at 3:19-4:4 (Keefe). The Court agreed to add the information contained in paragraph 11 of Hall's Reply to Government's Response to Defendant's Sentencing Memorandum, filed April 21, 2010 (Doc. 38), to paragraph 14 of the PSR as part of Hall's version of the events. See Tr. at 4:17-5:1 (Court).
The Court's citations to the transcript of the hearing refers to the court reporter's original, unedited version. Any final transcript may contain slightly different page and/or line numbers.
Mr. Keefe argued that a variance is appropriate, because Hall is not in a similar situation to someone involved in higher-level drug trafficking; he is someone addicted to crack cocaine who needs to be able to feed his habit, and his criminal actions were how he attempted to feed that habit. See Tr. at 9:8-16 (Keefe). Hall argued that the Court should consider sentencing him at the low-end of a sentencing range that does not include the career offender enhancement — a sentence of 77 months. See Tr. at 11:14-19 (Keefe). The Court inquired how much time Hall has spent in prison, and Hall responded that he has spent about eight years of his life in prison. See Tr. at 16:5-16:16 (Court, Hall).
ANALYSIS
Hall's total offense level is 29, and his criminal history category is VI, establishing a guideline imprisonment range of 151 to 188 months. Hall requests a variance down to a sentence of 77 months. Because the Court does not believe that the sentence set forth in the guidelines is appropriate for this offense, the Court will grant Hall's request for a variance, but not to the extent that he requests.
With the addition of the information contained in paragraph 11 of Hall's Reply to Government's Response to Defendant's Sentencing Memorandum to paragraph 14 of the PSR as part of Hall's version of the events, the Court adopts the factual findings of the PSR as its own. There being no objections to the application of the guidelines in the PSR, the Court adopts those as its own as well. The Court has considered the guidelines, but in arriving at its sentence, the Court has taken into account not only the guidelines, but other sentencing goals. Specifically, the Court has considered the guideline sentencing range established for the applicable category of offense committed by the applicable category of defendant. After careful consideration of the circumstances of this case, the Court has determined that the punishment which is set forth in the guidelines is not appropriate for this offense. Hall employed neither a weapon nor violence in committing the bank robbery, although he told the teller he had a weapon. Hall has two prior convictions from 1995 for selling one rock of crack cocaine on two different occasions. These convictions are fairly old, and career criminal enhancement places Hall in the same category as a defendant who was involved in higher-level drug trafficking. Hall has a drug problem, and with enough time, that problem can probably be resolved. The Court concludes that a variance downward is appropriate, but not, as Hall requests, to a sentence that excludes the career offender enhancement.
The Court has considered the kinds of sentences and ranges established for similar defendants, and the Court believes that a significant sentence needs to be served here. Hall has been in jail or prison for a significant period of time, and incarceration has not yet deterred him from his problems with crack cocaine, nor has it deterred him from violating state, local, and now federal laws. The sentence, therefore, needs to be more significant than the 77 months that Hall requests.
To provide adequate deterrence, the Court's sentence must be more significant than what Hall has received in the state-court system in the past. Incarceration has not yet worked. Many of Hall's state sentences were suspended or Hall was placed on probation, and, although he has received significant sentences, he has only served approximately 7 years and 11 months, or about 95 months total. To comply with the purposes of § 3553(a), the Court believes Hall must serve a significant amount of time in prison for his crime. In the federal system, a defendant earns good time credit for exemplary compliance with institutional disciplinary regulations. See 18 U.S.C. § 3624(b). A defendant may receive credit toward the service of his sentence of up to 54 days at the end of each year of the prisoner's term of imprisonment. Moreover, because the Court has recommended that the BOP allow Hall to participate in its 500-hour drug and alcohol program, he may receive a further reduction in his sentence. Under federal law, he must serve eighty-five percent of the stated sentence. There are several possible guideline ranges for a criminal history category of VI that the Court considered below Hall's guideline range of 151 to 188 months: (i) 110-137 months; (ii) 120-150 months; (iii) 130-162 months; and (iv) 140-175 months. Using the low-end of the guideline ranges, eighty-five percent of 110 months is 93.5 months, and eighty-five percent of 120 months is 102 months. It appears that a sentence at the low-end of the 120 to 150 month range — or about a 3-offense-level variance — is needed to make certain that Hall serves a greater time than he has so far spent in custody.
To ensure that Hall serves more time than the 7 years and 11 months he served for his previous convictions, the Court will sentence Hall to 120 months. After careful consideration of the factors set forth in 18 U.S.C. § 3553(a), the Court believes that a sentence of 120 months is appropriate. A sentence of 120 months reflects the seriousness of attempting to rob a bank. The sentence also ensures that, if Hall receives good-time credits each year and credit for participating in the BOP's drug and alcohol program, he will still serve approximately 102 months of his sentence. A sentence of 120 months, therefore, is necessary to provide adequate deterrence and promote respect for the law — both by the general public and by Hall. Ultimately, the Court hopes that the time Hall serves in incarceration will enable him to break his addiction to crack cocaine, which has plagued him throughout his life and instigated many of his crimes, including this one. The reduction from the guideline range recognizes that Hall's offense did not involve a weapon or violence, no one was injured in his attempted robbery, and the age of Hall's two trafficking convictions. The length of the sentence promotes respect for the law — both by the general public and also by Hall. The length of the sentence also protects the public for a long time and otherwise fully reflects each of the factors set forth in 18 U.S.C. § 3553(a). While the Court's task, as a district court, is not to arrive at a reasonable sentence — it is to come up with one that reflects the factors in 18 U.S.C. § 3553(a), see United States v. Conlan, 500 F.3d 1167, 1169 (10th Cir. 2007) ("[A] district court's job is not to impose a reasonable sentence. Rather, a district court's mandate is to impose a sentence sufficient, but not greater than necessary, to comply with the purposes of section 3553(a)(2)." (citing United States v. Wilms, 495 F.3d 277, 281 (6th Cir. 2007) (internal quotation marks omitted))) — this sentence is more reasonable than one within the guidelines. Finally, the Court believes a sentence of 120 months is sufficient without being greater than necessary to comply with the purposes of punishment set forth in the Sentencing Reform Act.
As an additional justification for the Court's sentence, the Court also believes that the career enhancement, as applied to Hall, produced a sentence that is too high, because two of the offenses are rather old trafficking offenses; given Hall's criminal history, however, some enhancement is appropriate. The PSR correctly applied U.S.S.G. § 4B1.1(b)(C), which provides an offense level of 32. The Court believes, however, a sentence more like one that a defendant who receives an enhancement under § 4B1.1(b)(D), which provides an offense level of 29, is an appropriate variance in these circumstances. With the 3-level reduction for acceptance of responsibility, a defendant with an offense level of 26 and a criminal history category of VI would have a guideline sentencing range of 120-150 months.
IT IS ORDERED that Defendant Reginald Hall's request for a variance in his Sentencing Memorandum is granted in part and denied in part. The Court sentences Defendant Reginald Hall to a term of 120 months in the custody of the Bureau of Prisons.
June 28, 2006 IP Assignment Agreement. The IP Assignment Agreement purported to assign the asserted patents from AZ-UK to Abraxis. At that time AZ-UK could not assign the patents because it did not possess their titles. AZ-UK had no legal title to assign and, therefore, lacked standing to commence this litigation.
See Gaia Techs., Inc. v. Reconversion Techs., Inc., 93 F.3d 774, 778 (Fed. Cir. 1996) (dismissing plaintiff's patent and trademark infringement claims for lack of standing because of its "inability to prove that it was the owner of the Intellectual Property at the time the suit was filed"),
as amended on reh'g on different grounds, 104 F.3d 1296 (Fed. Cir. 1996);
see FilmTec Corp. v. Allied-Signal, Inc., 939 F.2d 1568, 1572 (Fed. Cir. 1991) (stating that the purported assignment is a nullity if the assignor had nothing to assign). The district court's ruling to the contrary was legal error.
The dissent contends that our "promise to assign" line of cases is irrelevant. Dissent Op. at 1372-73. The dissent's contention is erroneous. Because the APA is a promise by AZ-UK to assign the relevant patents to Abraxis when AZ-UK obtains legal title, under our "promise to assign" cases, a subsequent written agreement is necessary to consummate the assignment. See IpVenture, 503 F.3d at 1327. It is clear from the record that AZ-UK did not have legal title when it executed the June 28, 2006 IP Assignment Agreement and it did not obtain legal title to the patents until March 15, 2007. Whether, as the dissent argues, the March 15, 2007 assignments from Astra L and AZ-AB to AZ-UK contained nunc pro tunc provisions is irrelevant. Even if given retroactive effect, the March 15, 2007 assignments do not automatically assign the patents to Abraxis; a subsequent written agreement was necessary. The only subsequent written agreement between AZ-UK and Abraxis is the November 12, 2007 Intellectual Property Assignment Agreement. This document is a clear recognition by Abraxis that AZ-UK did not hold legal title and therefore could not have transferred the patents without a properly executed assignment. It was a futile attempt by the parties to correct a critical error by a nunc pro tunc assignment. The effect of this document — executed eight months after the lawsuit was filed — is the critical issue on appeal.
Even if, as the district court found, the March 15, 2007 agreements were considered to be retroactive, title to the asserted patents did not automatically vest in Abraxis upon the March 15, 2007 transfer to AZ-UK because the June 28, 2006 IP Assignment Agreement did not result in an immediate transfer of "expectant interests" to Abraxis. See Bd. of Trs. of Leland Stanford Junior Univ., 583 F.3d at 841-42. For title to vest in Abraxis, a further assignment by AZ-UK was required by the "Further Assurances" provision of the June 28, 2006 IP Assignment Agreement. Whether Astra L, AZ-AB, and AZ-UK are part of the same corporate structure and are not "complete strangers," therefore, is irrelevant because there was no valid written assignment to Abraxis. See 35 U.S.C. § 261 (assignments of patents must be in writing); Enzo APA 134 F.3d at 1093 (same). Common corporate structure does not overcome the requirement that even between a parent and a subsidiary, an appropriate written assignment is necessary to transfer legal title from one to the other. Without the transfer of legal title of the patents, Abraxis had no standing to bring this infringement action. Lans, 252 F.3d at 1328 (holding that a plaintiff-inventor, who assigned his patent to a corporation in which he was the sole shareholder and managing director prior to filing the action, lacked standing to sue).
AZ-UK finally assigned the asserted patents to Abraxis on November 12, 2007, nearly eight months after filing the complaint. Abraxis contends that the November 12, 2007 assignment confers standing because it was a nunc pro tunc assignment, thus, the requirement to have legal title to the patents on the day of suit was met retroactively. But the argument is to no avail because "if the original plaintiff lacked Article III initial standing, the suit must be dismissed, and the jurisdictional defect cannot be cured by . . . the subsequent purchase of an interest in the patent in suit." Schreiber Foods, 402 F.3d at 1203. Even if the November 12, 2007 agreement is considered to be a nunc pro tunc assignment, for purposes of standing, Abraxis was required to have legal title to the patents on the day it filed the complaint and that requirement can not be met retroactively. Enzo APA 134 F.3d at 1093 (vacating judgment of infringement and holding that " nunc pro tunc assignments are not sufficient to confer retroactive standing" where no written transfer of rights under patent had been made at the time claims were brought); Gaia Techs., 93 F.3d at 780 (reversing denial of motion to dismiss infringement complaint and vacating verdict that the asserted patents were infringed because alleged nunc pro tunc agreement was insufficient to cure the lack of standing existing when the complaint was filed). Thus, despite Abraxis's delayed attempt to obtain title to the asserted patents, the action must be dismissed because Abraxis lacked standing on the day it filed the action.
On December 5, 2008, Abraxis assigned all rights, title, and interest in the asserted patents to APP Pharmaceuticals LLC and joined APP Pharmaceuticals as a plaintiff in this action. See Abraxis BioScience, 2009 WL 904043, at *5. Because Abraxis did not have standing at the time it filed the complaint, the joinder of APP Pharmaceuticals in 2008 cannot cure the jurisdictional defect after the inception of the action.
While Abraxis filed an amended complaint on November 16, 2007, we look to the date of the original Complaint, March 15, 2007, because "the jurisdiction of the Court depends on the state of things at the time of the action brought." Keene Corp. v. United States, 508 U.S. 200, 207, 113 S.Ct. 2035, 124 L.Ed.2d 118 (1993); see Schreiber Foods, 402 F.3d at 1203, n. 7 ("The initial standing of the original plaintiff is assessed at the time of the original complaint, even if the complaint is later amended."); FED.R.CIV.P. 15(a) (c) (requiring an amended pleading to relate back to the date of the original pleading when the amendment asserts a claim that arises out of the conduct, transaction, or occurrence set out in the original pleading).
The dissent criticizes our reliance on Enzo. Dissent Op. at 1372. Yet, we are bound by Enzo and subsequent cases applying Enzo's clear holding. As we have stated before, "[t]his court's precedent clearly establishes that a nunc pro tunc assignment executed after filing of a lawsuit cannot retroactively cure standing that was deficient at the time of filing." Messagephone, Inc. v. SVI Sys.'s, Inc., 243 F.3d 556, ___ (Fed. Cir. 2000) (Table).
The dissent attempts to distinguish Enzo on the grounds that there was no evidence of any intention that the license would be exclusive before the suit was filed. Dissent Op. at 1372, The distinction is impuissant. First, the parties in Enzo argued that the nunc pro tunc assignment agreement "was a memorialization [sic] of the pre-suit oral agreement of the parties," thereby establishing evidence of an intention that the license would be exclusive before the suit was filed. 134 F.3d at 1092. Second, despite the dissent's focus on intent, neither Enzo nor any subsequent case involving nunc pro tunc assignments focused on intent. Instead, Enzo and its progeny stand for the clear proposition that irrespective of a party's intent, " nunc pro tunc assignments are not sufficient to confer retroactive standing." Id. at 1093 (formatting added).
The foregoing rule has a narrow exception. A party may sue for past infringement transpiring before it acquired legal title if a written assignment expressly grants the party a right to do so. Moore v. Marsh, 74 U.S. 515, 522, 7 Wall. 515, 19 L.Ed. 37 (1868) ("[I]t is a great mistake to suppose that the assignment of a patent carries with it a transfer of the right to damages for an infringement committed before such assignment."); Arachnid, 939 F.2d at 1579 n. 7, 1580-81 (holding that the right to sue for past infringement "must be express, and cannot be inferred from an assignment of the patent itself"). This exception is irrelevant to this case. Despite what the parties to the November 12, 2007 assignment believed, Abraxis was never granted the right to sue for past infringement that occurred when Navinta filed its ANDA and Paragraph IV Certification on November 13, 2006. The March 15, 2007 assignments to AZ-UK did not assign the right to sue for past infringement, thus AZ-UK could not have assigned those rights to Abraxis on November 12, 2007, even if the November 12, 2007 assignment is "considered" to be retroactive. Therefore, Abraxis's complaint must be dismissed because Abraxis lacked standing at the time the action was filed and continues to lack standing to sue for past infringement.
Finally, Abraxis improperly relies on Arachnid to support its argument that equitable title to the asserted patents through the APA was sufficient to confer standing to sue under the Hatch-Waxman Act. Arachnid concerned a present agreement to assign rights to future inventions. 939 F.2d at 1576, 1580. In contrast, the June 2006 IP Assignment Agreement attempted to assign rights to existing patents, but was ineffective, because the assignor, AZ-UK, did not own the patents at the time. Without ownership, AZ-UK had no authority to convey either the patents' equitable or legal titles to Abraxis. Cf. Arachnid, 939 F.2d at 1581. The legal title to the asserted patents remained with Astra L and AZ-AB until March 15, 2007 when it was transferred to AZ-UK, leaving Abraxis with defective legal title to the patents.
Accordingly, we reverse the denial of the motion to dismiss the infringement complaint for lack of standing, vacate the district court's judgment, and remand with instructions for the district court to dismiss Abraxis's complaint without prejudice. Because we vacate the judgment of the district court for lack of standing, we need not address Navinta's alternative jurisdictional ground for dismissal and we cannot review the merits of Navinta's arguments regarding infringement.
REVERSED, VACATED, AND REMANDED
NEWMAN, Circuit Judge, dissenting.
The district court, applying the laws of contract and property transfer, held that the three patents in suit were owned by the plaintiff Abraxis when this suit was filed, and that the plaintiff had standing to bring this suit. The defendant did not seek interlocutory review of that ruling; and there have been over three years of litigation, including full trial of infringement of all three patents, and judicial determination of complex questions of law and fact concerning the Hatch-Waxman Act and its application. This court now finds that the plaintiff did not have standing, after all.
The court thus erases the trial, nullifies the judgment, cancels the appeal, and sends the case back so that the parties and the district court and this court can do it all again. However, the court has not shown reversible error in the district court's ruling on the question of standing, a ruling based on state contract and commercial transaction law. Instead, the panel majority creates a new and convoluted law unique to the patent aspect of commercial transactions. No special public policy is served, and no reason exists for creating a new commercial law, divergent from the governing state law, when the subject of the commercial sale is a patent. I must, respectfully, dissent.
DISCUSSION
New York law applies to these sales and transfer agreements. All of the documents state, and the parties and the district court agree, that the Asset Purchase Agreement and all of the related agreements are governed by New York law. Indeed, the choice of law is fundamental to this court's ruling, for my colleagues do not dispute that when New York law is applied, the district court's decision on standing should be upheld. Instead, the panel majority holds, contrary to New York law, that these commercial contracts cannot be given the effective date of the sales contract, on which these patents were sold and ownership was transferred. Thus although the parties to these contracts do not dispute their effective date, my colleagues now permit third parties to challenge and invalidate this commercial transaction, despite its undisputed validity as between the parties to the transaction.
New York law is otherwise. Indeed, all state and federal law is otherwise.
A
The master agreement between AstraZeneca UK and Abraxis, called the Asset Purchase Agreement (APA) and dated April 26, 2006, provided for the sale and purchase of eight pharmaceutical products and their patents. This master agreement contains a complex series of avowals, warranties, covenants, and considerations provided by each party and states that various aspects will be the subject of "Acquisition Documents," defining these "Acquisition Documents" as "any and all other agreements, instruments, certificates and other documents executed and delivered in connection with this Agreement." APA § 1.1. Section 3.1 of the APA states that
the effectiveness of the documents, agreements, opinions and certificates delivered in accordance with [the APA], and the consummation of the transactions contemplated hereby shall be deemed to occur at the Effective Time.
The Effective Time is defined as "12:01 a.m., New York time on the Closing Date." The Closing Date is defined as June 28, 2006.
The Asset Purchase Agreement defines "Transferred Patent Rights" as the patents relating to the products that were sold. For the Transferred Patent Rights, APA § 2.1(e) provides that AstraZeneca UK ("the Seller")
shall, or shall cause one or more of its Affiliates to, Transfer to the Purchaser, and the Purchaser shall purchase and accept from the Seller or its Affiliates, as applicable, all of the right, title and interests of the Seller and its Affiliates in and to . . . all Transferred Patent Rights.
On June 28, 2006 the Intellectual Property Assignment Agreement was executed. This agreement states that the "provisions of this instrument are subject to the terms and conditions of the Purchase Agreement." The agreement states that the seller "hereby sells, assigns, conveys and transfers to Buyer . . . all of Seller's right, title and interest" in the patents on the attached Schedule A. Schedule A lists the three patents in suit, and other patents. The Intellectual Property Assignment Agreement includes a "Further Assurances" clause, wherein AstraZeneca UK agrees that it will "do, execute, acknowledge and deliver, or will cause to be done, executed, acknowledged and delivered, any and all further acts, conveyances, transfers, assignments, and assurances as necessary to grant, sell, convey, assign, transfer, set over to or vest in Buyer any of the Transferred Intellectual Property."
In early 2007 AstraZeneca UK learned that title to some of the patents on Schedule A remained with affiliates of AstraZeneca UK, and had not been formally assigned to Abraxis. Astra Läkemedel Aktieboag ("Astra L") was still the nominal assignee of U.S. Patent 4,870,086, and Astra Zeneca AB was still the nominal assignee of U.S. Patents 5,670,524 and 5,834,489. AstraZeneca UK acted in accordance with the Further Assurances clause, and on March 15, 2007 Astra L and AstraZeneca AB executed additional documents assigning these patents to AstraZeneca UK, the documents stating that "this instrument is being executed by the parties to enable the Transferee to further convey to Buyer that portion of the Transferred Assets" included in the Asset Purchase Agreement, "dated as of April 26, 2006 . . . pursuant to which Transferee agreed to sell to Buyer and Buyer agreed to purchase from Transferee the Transferred Assets, all as more particularly set out in the Purchase Agreement," with "consummation of the transactions . . . deemed to occur at the Effective Time" on the Closing Date. APA § 3.1. On November 12, 2007 AstraZeneca UK executed an additional document "confirming" that Abraxis has owned all "right, title, and interest" to the patents in suit "since no later than June 28, 2006."
It is not unusual to transfer a complex set of related assets through a master agreement and additional contracts and assurances. Here the specified patent rights were identified, and sold to Abraxis, in the Asset Purchase Agreement dated April 26, 2006. The patents were listed on Schedule A of the Intellectual Property Assignment Agreement dated June 28, 2006, and then, pursuant to the Further Assurances clause, on March 15, 2007 three of the patents that had been sold were subject to the Further Assurances of formal assignment and delivery, as required by the Asset Purchase Agreement and implemented in the Intellectual Property Assignment Agreement. Nonetheless, my colleagues dismiss the suit for lack of standing, deeming the transfer a "nullity" on inapt authority. Maj. Op. at 1365.
The district court reached a different conclusion, upon correct analysis of the transaction documents and on the entire record.
B.
The district court, applying New York law of contracts and property transfers, held that the March 15, 2007 assignment documents were "delivered in accordance with" the terms of the Asset Purchase Agreement and were effective as of June 28, 2006, as stated therein. The district court determined that the June 28, 2006 Closing Date applied to all of the listed patents. The court stated: "Given this retroactive effect, the [Intellectual Property Assignment Agreement] would then operate to transfer title from [AstraZeneca UK] to Abraxis as of that date as well," and held that the transfer was effective as of June 28, 2006. Abraxis BioScience, Inc. v. Navinta LLC, Civ. Action No. 07-1251, 2009 WL 904043, at *4 (D.N.J. Mar. 30, 2009). No error of law or fact has been shown in this ruling.
The district court applied the New York law of contracts, which recognizes provision of an effective date before or after the date of signing of a contract. See Viacom Int'l Inc. v. Tandem Prods., Inc., 368 F.Supp. 1264, 1270 (S.D.N.Y. 1974) ("When a written contract provides that it shall be effective `as of an earlier date, it generally is retroactive to the earlier date."); Faculty Ass'n of Suffolk Cmty. Coll. v. Public Emp't Relations Bd., 125 A.D.2d 307, 508 N.Y.S.2d 591, 592 (1986) (recognizing retroactive effect of a successor agreement going back to the expiration date of the predecessor contract); Local Union 1567, Int'l Bhd. of Electrical Workers, AFL-CIO v. Orange and Rockland Utils., Inc., 104 A.D.2d 413, 478 N.Y.S.2d 937, 938 (1984) (retroactive effective date provided by collective bargaining agreement was binding, and applied to grievances that arose before the agreement was executed); Matthews v. Jeremiah Burns, Inc., 205 Misc. 1006, 129 N.Y.S.2d 841, 847 (Sup.Ct. 1954) (amended agreement was retroactive to the date of the original amendment to which it referred, rather than taking effect only from the amendment's date of execution); see also Mutual Life Ins. Co. of N.Y. v. Hurni Packing Co., 263 U.S. 167, 175-76, 44 S.Ct. 90, 68 L.Ed. 235 (1923) (applying New York law, "It was competent for the parties to agree that the effective date of the policy should be one prior to its actual execution or issue; and this, in our opinion, is what they did."). Retroactivity also can serve to fill an unintended omission in an earlier agreement. See Local Union 1567, 478 N.Y.S.2d at 938; Matthews, 129 N.Y.S.2d at 847; Buffalo Police Benevolent Ass'n v. City of Buffalo, 114 Misc.2d 1091, 453 N.Y.S.2d 314, 317 (Sup.Ct. 1982) (collective bargaining agreement was made retroactive to cover the period between the lapse of the previous contract and the execution of the new contract).
It is beyond cavil that parties to a contract can set the effective date of their agreement. The district court found, in accordance with New York law, that the June 28, 2006 Closing Date applied to all of the documents that referred to that Closing Date, and that the March 15, 2007 assignments were effective on the Effective Date stated therein.
My colleagues hold that despite the explicit language of the contract documents and the intent of the parties as stated in the contracts, the patents were not transferred on any of the transfer dates stated in the contracts. This court rejects the district court's ruling that the March 15, 2007 reparative assignments were effective as of the Closing Date of June 28, 2006, although those patents were listed and sold in the closing documents. They even reject that the March 15, 2007 reparative assignments were effective on March 15, 2007. And they do not mention that even if there were some imperfection in ownership, it was corrected by the time the suit was filed.
C
The panel majority relies on assorted cases debating rights to future inventions. The question in this case is not whether or to whom an inventor assigned rights in possible unidentified future inventions, as in the "agree to assign" cases typified by Bd. Of Trustees of Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc., 583 F.3d 832, 841 (Fed. Cir. 2009). This case relates to the law governing the commercial sale of existing patents, not the law of future rights to unknown inventions.
Patent conveyances are contracts, and the interpretation of sales contracts is a matter of state law. New York law permits contracts to take effect on a specified date, when such is the parties' intent. Viacom, 368 F.Supp. at 1270; Faculty Ass'n of Suffolk Cmty. Coll, 508 N.Y.S.2d at 592; Local Union 1567, 478 N.Y.S.2d at 938; Matthews, 129 N.Y.S.2d at 847; see also Mutual Life, 263 U.S. at 175-76, 44 S.Ct. 90. It is incorrect for this court to refuse to apply the law that the parties have agreed to apply to these contracts. Indeed, my colleagues misdescribe New York contract law, ignoring the district court's citation of authority. The district court correctly applied New York law in holding that the listed patents had been transferred as of June 28, 2006, the Closing Date of the transaction, and that Abraxis had title to the patents when suit was filed. No contrary meaning has been suggested for any of these contracts, and no conflicting law has been cited.
New York law recognizes that correct contract interpretation implements the intent of the contracting parties. E.g., Greenfield v. Philles Records, Inc., 98 N.Y.2d 562, 750 N.Y.S.2d 565, 780 N.E.2d 166, 170 (2002) ("The fundamental, neutral precept of contract interpretation is that agreements are construed in accord with the parties' intent."). For the contracts before us, there is no uncertainty or indefiniteness or ambiguity. See id. ("Extrinsic evidence of the parties' intent may be considered only if the agreement is ambiguous, which is an issue of law for the courts to decide."). The district court relied on all of the contract documents, and gave effect to the parties' intent as stated in the Asset Purchase Agreement and all of the documents. E.g., Snug Harbor Square Venture v. Never Home Laundry, Inc., 252 A.D.2d 520, 675 N.Y.S.2d 365, 366 (1998) ("In construing a contract, the document must be read as a whole to determine the parties' purpose and intent, giving a practical interpretation to the language employed so that the parties' reasonable expectations are realized.").
No evidence of a different intent was offered, nor any plausible theory that the parties intended anything other than transfer of the patents on the Closing Date. The March 15, 2007 documents state that they are effective as of June 28, 2006, "to enable the Transferee to further convey to Buyer that portion of the Transferred Assets" included in the Asset Purchase Agreement, "pursuant to which Transferee agreed to sell to Buyer and Buyer agreed to purchase from Transferee the Transferred Assets, all as more particularly set out in the Purchase Agreement." The Asset Purchase Agreement states that the "Closing Date," June 28, 2006, is the effective date for the transaction. As the district court correctly held, this date applies no less to the reparative assignments than it does to the other aspects of this commercial transaction. See Sunrise Med. HHG, Inc. v. AirSep Corp., 95 F.Supp.2d 348, 436-37 (W.D.Pa. 2000) ("[A] nunc pro tunc assignment filed before the filing date of the action with an effective assignment date before the action does effect a valid transfer of rights sufficient to confer standing.") (citing Gaia Techs., Inc. v. Reconversion Techs., Inc., 93 F.3d 774, 779-80 (Fed. Cir.), amended on reh'g on different grounds, 104 F.3d 1296 (Fed. Cir. 1996)).
By ignoring this clear expression of the parties' intent, the majority has not given a "practical interpretation" to the agreements, and has failed to realize the parties' intentions. Snug Harbor, supra. The majority has done quite the opposite, engrafting a meaning that no party could reasonably or possibly have intended, and holding that despite all of these documents, ownership of these three patents was not transferred until the November 12, 2007 "confirmation" of ownership "since no later than June 28, 2006."
D
The panel majority states that this court has its own law, derived not from state law but from federal patent policy, in order to prevent litigants from filing suit before they have achieved ownership of the assets they seek to litigate, citing Enzo APA Son, Inc. v. Geapag A.G., 134 F.3d 1090, 1093 (Fed. Cir. 1998). In Enzo the court held that an exclusive license executed after a non-exclusive licensee filed suit did not establish standing at the time of filing, even if the exclusive license is stated to be retroactive. In Enzo the court found that there was no indication or evidence of any intention that the license would be exclusive before the suit was filed, despite an alleged oral agreement; thus the court held that the proposed retroactivity of exclusivity did not track an actual intent at the earlier time. Id. at 1093 (noting that no written license agreement existed at the time suit was filed). In sharp contrast, for the case at bar the Asset Purchase Agreement and the Intellectual Property Assignment Agreement state the sale of all rights to these patents. The parties intended that these patents would be included in the sale, and they were sold on the Closing Date of June 28, 2006. The reparative assignment documents on March 15, 2007 reflected that which was intended. See Mas-Hamilton Grp. v. LaGard, Inc., 156 F.3d 1206, 1211 (Fed. Cir. 1998) (distinguishing patentee's nunc pro tunc agreement correcting an earlier writing as of the earlier date, from Enzo, where a post-filing assignment could not retroactively cure the absence of any written pre-suit agreement). Enzo does not affect the district court's ruling under New York law, for here there were explicit written pre-suit sales and transfer agreements.
As mentioned ante, the panel majority relies on cases interpreting "promise to assign" disputes, stating that these cases mean that the district court erred in implementing the Further Assurances provision of the June 28, 2006 Intellectual Property Assignment Agreement. Maj. Op. at 1364-65. However, the "promise to assign" cases do not invalidate, and indeed have no relation to this Further Assurances provision, for they relate to the special situation of ownership of future inventions not made at the time of the "promise to assign." See, e.g., Arachnid, Inc. v. Merit Indus., Inc., 939 F.2d 1574, 1576 (Fed. Cir. 1991) (disputing rights to an invention that may have been conceived during a consulting project). Issues arising from employment contracts have arisen on a variety of facts, but do not relate even remotely to this case. The majority's reliance on this class of cases is obscure.
The issue here is not an expectant interest in a future invention, but the effect under New York law of the explicit transfer of existing patents, as in the Intellectual Property Assignment Agreement. Indeed, the cases on which the majority relies do not support its thesis. For example, in Stanford v. Roche, supra, the court held that the language "do hereby assign" effected a present assignment, 583 F.3d at 842, although the invention and patent did not exist when the contract was made. Here, in contrast, all of the patents at issue were listed in the Asset Purchase Agreement. And even if this court were to conclude that the transfer required separate remedial assignment documents, these documents were obtained when this suit was filed. Thus standing is established even on the majority's position.
In addition, as a matter of contract interpretation, Federal Circuit precedent is contrary to the position of the panel majority. For example, in Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245, 1250 (Fed. Cir. 2000) the court explained that the "substance of what was granted" governs the interpretation of contracts, quoting Vaupel Textilmaschinen KG v. Meccanica Euro Italia S.P.A., 944 F.2d 870, 874 (Fed. Cir. 1991). The court in Speedplay authorized correcting an error in the patent number in view of the clear intent of the parties, whereby the correction was held retroactive to the date of the contract. As another example, in Viskase Corp. v. American National Can Co., 261 F.3d 1316, 1328-29 (Fed. Cir. 2001), this court held that a patent's incorrect naming of inventors did not impair the patent owner's rights and thus did not undermine standing to sue. These rulings, like New York law and all contract law, implement contractual intent.
No evidence of any conflicting intent or purpose has been offered as to the Asset Purchase Agreement and any of the related contracts. All parties to the transaction agree that the patents were sold and transferred to Abraxis as of the Effective Date stated in the agreements. This court's ruling that the transaction was legally void is negated by all precedent, is contrary to New York law, and is not within any federal exception to state law. The district court correctly ruled that Abraxis had standing to sue when this case was filed. With all respect to my colleagues on this panel, I must dissent from their ruling and their reasoning.
Although the court dismisses the case for lack of standing, my colleagues nonetheless also offer remarks that appear to be directed to the merits. However, if there was no standing in the district court, the merits decision is not before this panel for review.